International Finance

For much of the twentieth century, leaders and policymakers around the world viewed the strategic importance of trade, and of international economic policy more generally, largely through the lens of military strength.

The normal rhythm of politics tends to lead most nations’ economies around in a circle, ashes to ashes. This life cycle starts with a crisis, which forces leaders to reform, which triggers an economic revival, which lulls leaders into complacency, which plunges the economy back into crisis again.

Benn Steil's essay in the July/August issue of Foreign Affairs looks at the international consequences of U.S. monetary policy action. He argues that developing-nation governments are coming to see the need for engineering current-account surpluses and large dollar-reserve stockpiles as a means of insulating themselves against Fed-induced capital-flow whiplash. As this amounts to "currency manipulation" in the eyes of U.S. policymakers, trade tensions are apt to grow.

Born to professors in what was then still a British colony, Ngozi Okonjo-Iweala was a teenager when civil war broke out in Nigeria seven years after independence, and she ended up working as a cook for the Biafran rebels on the frontlines.

The Trans-Pacific Partnership, a massive multilateral trade agreement now in the works that focuses on the Asia-Pacific region, could add billions of dollars to the U.S. economy and solidify Washington's commitment to the Pacific. But if the Obama administration fails to calm critics of the deal, there is a growing possibility that it could collapse.

As the global financial sector has swelled, the gap between the rich and the poor has grown. Three new books -- by James Galbraith, Robert Shiller, and Charles Ferguson -- come down differently on how much banks are to blame for inequality and what the government should do about it.

Global financial instability has sparked a surge in "monetary nationalism" -- the idea that countries must make and control their own currencies. But globalization and monetary nationalism are a dangerous combination, a cause of financial crises and geopolitical tension. The world needs to abandon unwanted currencies, replacing them with dollars, euros, and multinational currencies as yet unborn.

While Greece has failed to meet the budget requirements mandated by the EU and the IMF, experts say eurozone leaders will likely continue to bailout the country because the costs of letting it go are far greater.

U.S. Treasury Secretary Timothy Geithner called for a global rebalancing and sought to reassure China, the largest holder of U.S. debt, about the health of the dollar. Experts say this shift is needed but some Chinese remain skeptical about the U.S. currency.

Swine flu has already shaken markets. While the scope of the current outbreak remains unknown, experts say a severe pandemic could drive productivity losses, dampen trade, and lower product demand at a time of preexisting economic frailty.

As the effects of the financial crisis stretch beyond America and Europe, the world's emerging markets start to wobble and analysts wonder just how hard China, India, and other major developing nations will be hit.

A surge in the U.S. dollar and Japanese yen comes as investors pull money from commodities and emerging markets. The trend, and particularly the spike in the yen, poses another problem for financial markets.

CFR Experts Guide

The Council on Foreign Relations' David Rockefeller Studies Program—CFR's "think tank"—is home to more than seventy full-time, adjunct, and visiting scholars and practitioners (called "fellows"). Their expertise covers the world's major regions as well as the critical issues shaping today's global agenda. Download the printable CFR Experts Guide.

The authors argue that the United States has responded inadequately to the rise of Chinese power and recommend placing less strategic emphasis on the goal of integrating China into the international system and more on balancing China's rise.

Campbell evaluates the implications of the Boko Haram insurgency and recommends that the United States support Nigerian efforts to address the drivers of Boko Haram, such as poverty and corruption, and to foster stronger ties with Nigerian civil society.

2014 Annual Report

Learn more about CFR’s mission and its work over the past year in the 2014 Annual Report. The Annual Report spotlights new initiatives, high-profile events, and authoritative scholarship from CFR experts, and includes a message from CFR President Richard N. Haass.Read and download »